Understanding Your Tax Bracket: 2024 & 2025 Guide
One of the most common misconceptions about the US tax system is how tax brackets actually work. Many people fear that earning more money will push them into a higher bracket, causing them to take home less money than before. This is a myth.
The US uses a progressive tax system. This means that as your income rises, you pay higher tax rates only on the portion of income that falls into the higher brackets—not on your entire income. Our Tax Bracket Calculator helps you visualize exactly how your income is split across these tiers and calculates your true tax liability.
Marginal vs. Effective Tax Rate
To understand your taxes, you need to know the difference between these two key terms:
- Marginal Tax Rate: This is the tax rate applied to the very last dollar you earned. It tells you how much tax you would pay on an additional $1 of income. For example, if you are in the 22% bracket, earning another $100 would cost you $22 in federal tax.
- Effective Tax Rate: This is the average rate you pay on your total income after all the progressive brackets are blended together. This number is almost always lower than your marginal rate.
For example, a single filer earning $100,000 in 2024 falls into the 22% marginal bracket. However, their effective tax rate is only about 14.8% because their first chunk of income is taxed at 10% and 12%.
2024 Tax Brackets (Filed in 2025)
The IRS adjusts tax brackets annually for inflation. Here are the brackets for the 2024 tax year:
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 10% | $0 to $11,600 | $0 to $23,200 | $0 to $16,550 |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 | $16,551 to $63,100 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 | $63,101 to $100,500 |
| 24% | $100,526 to $191,950 | $201,051 to $383,900 | $100,501 to $191,950 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 | $191,951 to $243,700 |
| 35% | $243,726 to $609,350 | $487,451 to $731,200 | $243,701 to $609,350 |
| 37% | Over $609,350 | Over $731,200 | Over $609,350 |
2025 Tax Brackets (Filed in 2026)
Looking ahead? The IRS has announced the inflation-adjusted brackets for 2025. You can toggle the calculator above to "2025" to see how these changes might affect your future tax liability. Generally, the brackets have shifted upwards by about 2.8%, allowing you to earn more income before hitting a higher tax rate.
Strategies to Lower Your Tax Bracket
While you can't change the tax rates, you can change your taxable income. Lowering your taxable income might keep you in a lower bracket or reduce the amount of income subject to your highest marginal rate.
- Contribute to a 401(k) or 403(b): Contributions to traditional retirement accounts are made pre-tax, directly reducing your taxable income for the year.
- Contribute to an HSA: If you have a high-deductible health plan, Health Savings Account (HSA) contributions are 100% tax-deductible.
- Itemize Deductions: If your itemized deductions (mortgage interest, state taxes, charitable donations) exceed the standard deduction, itemizing can lower your taxable income further. Check our Taxable Income Calculator to compare.
Common Myths About Tax Brackets
Myth: "I don't want a raise because it will put me in a higher tax bracket and I'll lose money."
Fact: This is mathematically impossible in a progressive tax system. Moving to a higher bracket only affects the extra money you earn. If you get a raise, you will always take home more money, even if that specific raise is taxed at a slightly higher percentage.